Attack on Saudi plants prompts Senate inquiry

The attack was also said to have ceased the production of some 5.7 million barrels of crude per day

Asian laborers work at the construction site of Saudi Aramco’s (the national oil company) Al-Khurais central oil processing facility in the Saudi Arabian desert. AFP

Senator Sherwin Gatchalian on Friday called for an inquiry into the impact of the drone attack that hit two Saudi Arabian Oil Co.’s (Aramco) oil production plants.

Gatchalian, chair of the Senate Committee on Energy, filed Senate Resolution No. 139 to conduct an inquiry and ensure energy supply in the Philippines, and look into the short- to long-term plans of the Department of Energy to mitigate the adverse repercussions of supply shocks on the country’s oil supply and on prices following the Aramco attack.

Gatchalian said the Senate committee will commence with the hearing on Monday, 23 September.

“The attack on Aramco eliminated about 5 percent of global oil supply and triggered a 12 percent increase in oil prices on 16 September,” Gatchalian said.

“This attack on Saudi Aramco and the brewing conflict in the region raises concerns on the availability of supply and its effect on oil prices in the Philippines, specifically in the transportation and power generation sectors,” he added.

At the start of the week, news of an attack on Saudi Aramco’s production plants — the country’s largest oil production plant — sent global petroleum prices soaring amid worries of a supply cut in Asia. Yemen’s Iran-backed Houthi rebels claimed responsibility for the attack.

The attack was also said to have ceased the production of some 5.7 million barrels of crude per day, which represent more than half of Saudi Arabia’s global daily exports and over 5 percent of world’s daily crude oil production.

Most of Saudi Arabia’s output from the facility was said to be for the Asian market.

Following the attack, US President Donald Trump raised the possibility of a military strike on Iran.

State Secretary Mike Pompeo said the United States will work with its partners to ensure that the energy market remains well-supplied and Iran is held accountable for its aggression.

Following the news, all Philippine industry players hiked petroleum prices by as much as P1.35 per liter.